Is this dirt cheap FTSE 250 stock a once-in-a-decade buy after jumping 21% in a month?

It’s uncommon for me to purchase a FTSE 250 inventory. Many of the 18 shares I maintain in my self-invested private pension (SIPP) are blue-chips culled from the FTSE 100. I’ll should rethink although, given my latest profitable foray into the UK’s mid-cap index.

I purchased retirement planning adviser Simply Group (LSE: JUST) on 30 November. The inventory seemed too low cost to disregard buying and selling at lower than 4 instances earnings. After a sluggish begin, it’s taken off.

I purchased Simply in time

The Simply Group share value is up 22.77% over 12 months, however many of the motion got here final month, when it climbed 21.85%. I bought my timing good, as I’m personally up 29.67% and feeling more than happy with myself.

Simply solely floated on the FTSE in 2013, and after a shiny begin was hammered by former chancellor George Osborne’s April 2015 pension freedom reforms. They liberated savers from the duty to purchase an annuity at retirement, and gross sales collapsed in a single day.

Simply has adjusted, focusing on the fast-growing bulk annuities enterprise, the place it’s holding its personal in opposition to FTSE 100 massive boys like Aviva and Authorized & Common Group. It’s additionally gives fairness launch lifetime mortgages, one other increasing market, which permits cash-strapped older householders to unlock capital from their properties.

Simply has additionally benefitted from surging rates of interest, as this has revived demand for particular person annuities, as charges climbed with bond yields.

The inventory jumped 15% on 7 March after full-year outcomes confirmed a 47% improve in underlying working revenue to £377m. Annuity gross sales have been the very best in a decade, up 46% to £5.3bn.

Extra development to come back

The board stays optimistic for sustained development of 15% in underlying working revenue. Group CEO David Richardson expects “to realize our goal of doubling income in three years as a substitute of the initially meant 5”.

The steadiness sheet appears robust with a capital protection ratio of 197%. Importantly, it now has tangible web belongings per share of 224p, which is greater than double the present share value of 106p. There’s loads of scope for a re-rating right here.

The two% yield can’t compete with the bumper choices from Aviva and L&G, however its dividends ought to develop at a sooner tempo, judging by the latest 20% hike.

There are dangers, as ever. If Simply misses its bold development targets, dissatisfied buyers will take their revenge on the share value. Rates of interest will fall sooner or later, and this might reverse the latest improve in particular person annuity gross sales. The majority annuity market should hit its ceiling sooner or later.

Regardless of these considerations, there’s no approach I’m promoting Simply Group. I’m hoping to let this one run and run, as the subsequent decade appears extra promising than the final one. The one query is whether or not I purchase extra in the present day. I would simply try this.